4P Product and Placement Chapter 12 Course BUS 101 Lecturer NNA Classifying Goods and Services Consumer products are products and services for personal consumption Classifications ID: 269564
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Producing and Distributing Goods and Services4P: Product and Placement
Chapter
12
Course: BUS 101
Lecturer:
NNASlide2
Classifying Goods and ServicesConsumer products are products and services for personal consumption.
Classifications:Convenience products
Shopping productsSpecialty products
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Consumer products
Convenience products
are consumer products and services that the customer usually buys frequently, immediately, and with a minimum comparison and buying effort.
Newspapers
Candy Fast food
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Shopping products are consumer products and services that the customer compares carefully on suitability, quality, price, and style. Furniture Used cars
Appliances
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Consumer productsSlide5
Specialty products
are consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort.
Specialist medical services
Designer clothes High-end electronics
Expensive cars
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Consumer productsSlide6Slide7
Classifying Business GoodsBusiness products are products purchased for further processing or for use in conducting a business. Classification:installations, accessory equipment,
Component parts and materials, raw materials,
supplies.
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Classifying Business GoodsInstallations are Major capital items. Expensive and often involve buyer and seller negotiations that may last for more than a year before a purchase actually is made.
factories, offices, heavy machinery
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Classifying Business GoodsAccessory equipment
also includes capital items, Less expensive and Shorter lived than installations
Involve fewer decision makers. Examples : fax machines.Slide10
Classifying Business GoodsMaterials and component parts are finished business goods that become part of a final productsmall motors, tires
Raw materials are farm and natural products used in producing other final products
milk, iron ore, leather, and soybeans.Slide11
Classifying Business GoodsSupplies and services Supplies are items used in a firm’s daily operation that do not become part of the final product.Operating supplies: paper, pencilRepair and maintenance items: paint, nailsBusiness services: window cleaning, computer repairSlide12
Classifying ServicesB2B: Business to Business serviceB2C: Business to Consumer serviceservices can also be convenience (Maid), shopping (Dentist), or specialty (Lawyer)Characteristics of ServicesIntangible:
Can’t be touched or physically felt
Inseparable: the service provider is the service; the two are inseparable in the buyer’s mindPerishable: firms cannot stockpile service in inventory
Difficult to standardize: must meet individual customers’ needsSlide13
Product Lines and Product MixProduct line group of related products that are physically similar or are intended for the same market.Product mix company’s assortment of product lines and individual offerings
Baby Gap is just one of the product lines offered by the Gap clothing chain. The retail group also offers traditional Gap casual clothing, Old Navy’s stylish but low-priced line, and Banana Republic’s upscale clothing.Slide14
Product Mix and Product lineSlide15
Product Life Cycle PLC)Slide16
Product Life-Cycle Strategies
2. Introduction Stage
Slow sales growthLittle or no profit
High distribution and promotion expense
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Dreyer’s, the largest ice cream maker in the United States, promoted an essay contest as a first step to giving away 1,500 free ice cream parties to get people to try its lower-fat ice cream called Slow ChurnedSlide17
Product Life-Cycle Strategies
3. Growth Stage
Sales increaseNew customers
New competitors enter the market with similar offeringsPrice stability or decline to increase sales
Profits increase
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Product Life-Cycle Strategies4. Maturity Stage
Sales slows downIncrease product availability
Weaker competitors leave the marketPrice reduces
Firms concentrate on capturing competitors’ customers Aggressive promotion
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Cell phone network companies in Bangladesh are continuously promoting their product to capture competitors’ customersSlide19
Product Life-Cycle Strategies5. Decline StageCompetitors gradually exit
Decline stage is caused by
Product innovation shift in consumer preferences
Technological change
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Due to technological change,
vcr
and floppy became extinct and
cd
‘s product life cycle became in the declined positionSlide20
Stages in New-Product DevelopmentSlide21
The New-Product Development Processi)
Generate new product ideas is the systematic search for new-product ideas.
Sources of new-product ideas:a. Internal: Gathering new product ideas by-
Own employeesResearch scientists
b. External: Gathering new product ideas from-
DistributorsSuppliers
Inventors outside the firmCustomers (most successful source)
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The New-Product Development Processii) Idea Screening Screening new-product ideas to spot good ideas and drop poor ones as soon as possible
iii) Concept Development and Business analysis: further screening occurs
Concept testing—marketing research designed to solicit initial consumer reaction to new-product ideas
Focus groups are formal sessions in which consumers meet with marketers to discuss what they like or dislike about current products and perhaps test or sample a new offering to provide some immediate feedback.Slide23
The New-Product Development ProcessProduct development involves the creation and testing of one or more physical versions by the R&D or engineering departments.
vii) Test marketing
provides the marketer with experience in testing the product and entire marketing program before full introduction.
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Test marketing: KFC test marketed its new Kentucky Grilled Chicken product for three years before rolling it out nationally. Slide24
The New-Product Development Processvi) Commercialization: the product is made generally available in the marketplaceSometimes this stage is referred to as a product launchSlide25Slide26
Product IdentificationA major aspect of developing a successful new product involves methods used for identifying a product and distinguishing it from competing offerings.Both tangible goods and intangible services are identified by brands, brand names, and trademarksSlide27
Product Identificationbrand is a name, term, sign, symbol, design, or some combination thereof used to identify the products of one firm and to differentiate them from competitive offerings.A brand name
is that part of the brand consisting of words or letters included in a name used to identify and distinguish the firm’s offerings from those of competitorsSlide28
Selecting an Effective Brand NameBrand name must be-Easy to pronounce, recognize and remember (advertising campaign of EZ (easy) failed coz in Britain Z is pronounced as Zed)Convey the right image to the buyer (Dove soap gives an impression of mildness)
Legally protectable (brand names cannot contain words in general use, such as television or automobile) Slide29
Brand Categoriesmanufacturer’s (or national) brand: A brand offered and promoted by a manufacturer. E.g. Tide, ReebokA private (or store) brand
identifies a product that is not linked to the manufacturer but instead carries a wholesaler’s or retailer’s label.
E.g. Wal-Mart chickenSlide30
Brand CategoriesA family brand is a single brand name used for several related products. E.g. Johnson & Johnsonan
individual branding strategy by giving each product within a line a different name.
e.g. Procter & Gamble has individual brand names for its different laundry detergents, including Tide, Cheer, and DashSlide31
Brand LoyaltyBrand Loyalty Marketers measure brand loyalty in three stages:Brand recognition is brand acceptance strong enough that the consumer is aware of the brand, but not strong enough to cause a preference over other brands.
Brand preference occurs when a consumer chooses one firm’s brand over a competitor’s
Brand insistence is the ultimate degree of brand loyalty, in which the consumer will accept no substitute for a preferred brandSlide32
Brand EquityBrand Equity the added value that a respected and successful name gives to a product.Brand awareness
means the product is the first one that comes to mind when a product category is mentioned.Slide33
Marketing ChannelsSlide34
Distribution Strategy: Distribution Channelsdirect distribution channel which carries goods directly from producer to consumer or business userDistribution Channels Using Marketing Intermediaries: distribution channels that involve several different marketing intermediaries. A marketing intermediary (also called a middleman) is a business firm that moves goods between producers and consumers or business users.Slide35Slide36Slide37
Wholesaling Wholesaler distribution channel member that sells primarily to retailers, other wholesalers, or business users.Manufacturer-Owned Wholesaling Intermediaries: A manufacturer’s marketing manager may decide to distribute goods directly through company owned facilities to control distribution or customer service.Slide38
Wholesaling Independent Wholesaling IntermediariesMerchant wholesalers, like apparel wholesaler WholesaleSarong.com, are independently owned wholesaling intermediaries that take title to the goods they handlefull-function merchant wholesaler
provides a complete assortment of services for retailers or industrial buyers, such as warehousing, shipping, and even financing
A limited-function merchant wholesaler also takes legal title to the products it handles, but it provides fewer services to the retailers to which it sells.agents and brokers
: They may or may not take possession of the goods they handle, but they never take title, working mainly to bring buyers and sellers togetherSlide39
Retailing Retailer: channel member that sells goods and services to individuals for their own use rather than for resale.Non-store Retailers Store retailersSlide40Slide41
Types of Store RetailersSpecialty store: Sells complete set of narrow line of merchandiseConvenience store:
Only staple productsLong hoursEasy to access locationsSlide42
Types of Store RetailersWarehouse club:Warehouse style storesDiscount for membership card holdersDiscount store:
Products sold in discount pricesSlide43
Types of Store RetailersSupermarketLarge self service retailerFactory outlet:
Manufacturer owned shopssell overproduced products
sell for inventory clearance at discounted priceSlide44
Types of Store RetailersDepartment stores:Offers a wide variety of products in different department
SupercenterGiant stores selling foods and general merchandise Slide45
How retailers competeIdentifying a Target MarketSelecting a Product StrategyShaping a Customer Service StrategySelecting a Pricing StrategyChoosing a LocationBuilding a Promotional StrategyCreating a Store AtmosphereSlide46
Distribution IntensityIntensive distribution involves placing a firm’s products in nearly every available outlet. suits low-priced convenience goods such as milk, newspapers, and soft drinks. requires cooperation by many intermediaries, including wholesalers and retailers, to achieve maximum coverage.
Selective distribution is a market-coverage strategy in which a manufacturer selects only a limited number of retailers to distribute its product lines.
can reduce total marketing costs establish strong working relationships within the channel.Slide47
Distribution IntensityExclusive distribution, at the other end of the continuum from intensive distribution, limits market coverage in a specific geographical region. suits relatively expensive specialty products such as Rolex watchesRetailers are carefully selected to enhance the product’s image to the market and to ensure that well-trained personnel will contribute to customer satisfaction.